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Macau's Gaming Market to Finish the Year Strong, Say Analysts

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Analysts with JP Morgan are optimistic about Macau's gaming revenue for 2023, projecting a positive outlook for the year-end figures. The investment bank estimates that by the end of December, Macau's gross gaming revenue (GGR) for the month will hit MOP17 billion (US$2.1 billion), presenting a promising recovery for the region.

Macau Gaming Continues to Gain Traction

According to the latest investment memo, JP Morgan's analysts highlight that this projection corresponds to a daily run-rate of approximately MOP550 million (US$68.4 million). This assumes a complete recovery of the mass market segment.

Related: Macau November Gambling Revenue Hits 435% Rise Year-on-Year

The analysis suggests that this could lead to a substantial 8% quarter-on-quarter growth in the fourth quarter's GGR, with the mass market exhibiting slightly stronger growth at 9% quarter-on-quarter. As a result, the industry's EBITDA (earnings before interest, taxes, depreciation, and amortization) is anticipated to experience a robust 8 to 10% quarter-on-quarter growth, surpassing the historical seasonality of 5% quarter-on-quarter growth pre-COVID-19.

JP Morgan's evaluation considers the recent initiatives taken by the Macau government, launching a series of iconic events from December extending into January. These events are anticipated to contribute positively to the overall gaming revenue.

December Starts Slows, Gains Strength

However, the analysis also notes that Macau's GGR faced some challenges in the initial 10 days of the month, attributed mainly to unfavorable luck, especially in the VIP segment. The estimated daily run-rate for GGR during this period was MOP520 million (US$64.7 million), a slight dip from November's MOP535 million (US$68.8 million). The lower performance was partly attributed to the less-favorable VIP luck factor.

Despite this, Macau's Secretary for Economy and Finance, Lei Wai Nong, remains confident in the city's ability to welcome around 28 million visitors by the year's end. This follows a successful reception of over 25 million tourists in the first 11 months of 2023, showcasing the city's resilience and recovery since the removal of all travel restrictions in January.

The Macau gaming industry's swift rebound is evident in the eleven months leading up to November 30, with casino GGR reaching MOP164.5 billion (US$20.4 billion). This reflects a 325% surge compared to the corresponding period the previous year, underlining Macau's recovery in the post-COVID-19 pandemic landscape.

While the entire global gaming industry suffered from COVID-19, Macau was hit hardest. At the time, the city shut down almost entirely because of local regulations and border closures. As a result, the city's casinos experienced extended black-out periods across two years and are still recovering.

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